U.S. stock futures crept higher in the early trade Tuesday as Wall Street awaited a major inflation reading poised to direct expectations on the Federal Reserve’s path forward for interest rates.
The Bureau of Labor Statistics is scheduled to release its January Consumer Price Index (CPI) at 8:30 a.m. ET.
Economists expect headline CPI rose 6.2% over the prior year last month consensus estimates from Bloomberg showed. On a month-over-month basis, CPI likely jumped 0.5% in January, according to the projections.
Futures tied to the S&P 500 (^GSPC) rose 0.2%, while futures on the Dow Jones Industrial Average (^DJI) ticked up 0.1%. Contracts on the technology-heavy Nasdaq Composite (^IXIC) were up 0.3%.
In other pockets of the market, Treasury yields held steady, while the U.S. dollar index advanced slightly.
If Wall Street estimates on CPI are realized, January’s figures would mark a monthly acceleration in inflation from a revised 0.1% increase in December — just as investor optimism began to grow over inflation’s trend downward and after Fed Chair Jerome Powell acknowledged the presence of “disinflation” in the economy.
“If you look at the 12-month change, we saw some pretty hefty inflation. It’s down substantially from the peak, and we’ll probably see inflation continue to moderate as the year goes on. But even by year-end, optimistically, inflation is still going to be up 3%, maybe 3.5% from a year and a half ago,” Cumberland Advisors chief U.S. economist David W. Berson told Yahoo Finance Live Monday.
“My guess is the Fed will not ease this year — it may not tighten much more, we might see fed funds at the peak go a little above 5% — but that’s very different from an expectation that by year-end the Fed will ease.”
EY-Parthenon Chief Economist Gregory Daco deemed the Federal Reserve’s “extreme” data dependence a a “risky strategy in a highly volatile global macroeconomic environment.”
“By devolving control of the narrative, the Fed exposes itself to potential abrupt pivots in market sentiment depending on the flow of economic data, which has been and will likely continue to be extremely volatile,” Daco said in an emailed note.
Back on the corporate side, shares of Palantir Technologies (PLTR) surged 17.7% pre-market Peter Thiel-founded data firm reported its first-ever profitable quarter and said it expects 2023 to be its first profitable year.
Avis Budget Group’s (CAR) stock advanced 2.5% ahead of the open after the car-rental company unveiled quarterly results after the closing bell Monday that beat Wall Street estimates.
Tesla (TSLA) increased the price of its Model Y performance crossover by $1,000 to $58,990, while cutting the price of the Model 3 sedan by $500 to $42,990, Reuters pointed out based on updates on the company’s website. This marks the fourth price change in two months. On Monday, Tesla logged its biggest two-day drop in more than a month, falling 6.1% across the past two trading sessions.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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